Stock markets ended Monday with mixed results, although one of the three major indices reached a new record close. After Federal Reserve Chairman Jerome Powell’s dovish speech at the Jackson Hole Economic Symposium on Friday, all eyes are now on an important inflation update and NVIDIA (NVDA) earnings, both expected later this week.
In fact, the PCE price index for July will be released before the stock market opens on Friday. The index measures consumer spending and is the Fed’s favorite inflation indicator.
Consumer prices, measured by PCE, “probably rose slightly in July from June, with inflation stable or rising slightly year-on-year,” says Bill AdamsChief Economist at Comerica Bank. The economist adds, however, that wage growth has likely slowed month-on-month after Employment report for July was weaker than expected.
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Today, an update on durable goods was the main event at the Economic calendarData from the Census Bureau showed that new orders for durable goods rose by 9.9% in July compared to the previous month. Excluding transportation, new orders rose by 0.2%. Excluding defense orders, new orders were 10.4% higher.
“A strong rebound in jet purchases led to a significant increase in durable goods activity in July,” says Jose Torressenior economist at Interactive Brokers. “The driving force behind the recovery was passenger aircraft transactions, which turned positive after the unfortunate cancellations in June. Defense aircraft and computers also supported the manufacturing sector.”
PDD records worst day ever after earnings figures
In terms of individual stocks, the US-listed shares of PDD investments (PDD) plunged 28.5% after Temu parent company reported earnings – its worst day ever. While the Chinese e-retailer beat expectations on earnings, its revenue results fell short.
Management pointed to “new challenges resulting from changing consumer demand, increasing competition and uncertainties in the global environment,” which it believes will also impact short-term financial results.
XPeng rises through insider purchases
Chinese stock XPeng (XPEV) rose 7.2% today on news that the electric vehicle maker’s CEO bought more than 2 million shares. Xiaopeng He is one of XPEV’s major shareholders and now owns around 18.8% of the company.
In a note released today, CFRA Research analyst Aaron Ho maintained a hold rating on XPEV. While the analyst expects sales momentum to continue, he worries that increasing competition in the EV space could make it difficult for small players like XPeng to expand.
Nvidia shares fall ahead of earnings
In individual stock news, NVIDIA fell 2.3% ahead of the chipmaker’s second-quarter earnings report, which is scheduled to be released after the market close on Wednesday.
“The company’s findings and guidance have an outsized impact because it has its finger on the pulse of AI spending,” says Louis Navellier, Chairman and Founder of Navellier & Partner“In the past, NVIDIA has said it could not meet demand. How that changes will be crucial, as will the timing of the new Blackwell chip.”
Nvidia was not the only chip stock to close in the red. Weakness was seen across the board, with Broadcom (AVGO, -4.1%), Arm Holdings (ARM, -5.0%) and Marvell Technology (MRVL, -4.2%) was among the clear losers.
The collapse in semiconductor stocks weighed on technology-heavy Nasdaq-Compositewhich fell by 0.9% to 17,725. The S&P500 (-0.3% to 5,616) also closed lower, while the Dow Jones Industrial Average rose 0.2% to 41,240, a new record closing value.
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